News

Sugar tax could be coming to your soda

PROPOSED TAX:The legislation would levy a one-cent tax on manufacturers for every teaspoon of sugar in most beverages. The law, which would exempt drinks such as milk and 100 percent fruit juices, targets beverages with significant amounts of added sugars. That would translate into a tax of about 15 cents on a 20-ounce bottle of Coca-Cola. Photo: Reuters

NEW YORK (Reuters) – A Connecticut lawmaker on Wednesday will launch the first national effort in years to tax soda drinks, the latest bid by regulators and politicians to stem rising obesity and diabetes rates by curbing the consumption of sugary drinks.

While former New York City mayor Michael Bloomberg’s controversial effort to limit cola size was struck down by a court earlier this year, other cities such as San Francisco have taken up the cause, emboldening critics and causing growing concern among beverage makers.

Democratic Representative Rosa DeLauro of Connecticut is under no illusion about the chances that her Sugar-Sweetened Beverages Tax Act will become law. She does not even expect the measure to come to a vote.

But she wants to bring the debate to Washington for the first time in years, hoping it might help galvanize local efforts to levy taxes on sweetened beverages.

“We have a serious health problem. It is in part related to the consumption of sugar and added sugars and sugary beverages. Therefore we need to move to do something to avert this crisis,” DeLauro told Reuters on Tuesday.

DeLauro’s legislation would levy a one-cent tax on manufacturers for every teaspoon of sugar in most beverages. The law, which would exempt drinks such as milk and 100 percent fruit juices, targets beverages with significant amounts of added sugars. That would translate into a tax of about 15 cents on a 20-ounce bottle of Coca-Cola, according to a spokeswoman for DeLauro.

The legislation would be the first discussion about a national soda tax since a proposal to link a similar tax to the Affordable Care Act in 2009, and the most significant national response to a local groundswell to curb consumption.

Bloomberg’s effort was struck down by the state’s highest court last month. San Francisco and Berkeley will hold ballet measures to introduce soda taxes in November, following attempts to introduce levies from Maine to Hawaii.

Each attempt has failed so far, and proponents blame a well-funded and well-organized industry they say shifted the debate to a question of government overreach.

The American Beverage Association, whose members include Coca-Cola Co and PepsiCo Inc, is funding a local activist organization called Stop Unfair Taxes – Coalition for an Affordable City, which has said the initiative will drive up food and beverage prices.

Proponents of the taxes say the industry is very adept at shifting the argument and questioning the links between the consumption of sugary drinks and health issues.

For the ABA, it is a cause worth fighting. A soda tax that took effect in Mexico in January has already cut consumption and hurt profits. Mexican coke bottler Femsa reported last week that sales of fizzy drinks slumped because if the tax.

“It’s our responsibility as a trade association to the defend the industry against discriminatory proposals when they are introduced,” said Christopher Gindlesperger, ABA spokesman.